EXHIBIT 1-A
DRAFT MINUTES Regular Meeting Board of Directors Monterey Peninsula Water Management District December 14, 2009
The meeting was called to order at 7:05 PM in the District Conference Room.	CALL TO ORDER/ROLL CALL
Directors Present: Kristi Markey, Chair -- Division 3 Regina Doyle, Vice Chair – Division 4 Alvin Edwards – Division 1 Judi Lehman – Division 2 Bob Brower – Division 5 David Pendergrass – Mayoral Representative David Potter – Monterey County Board of Supervisors Directors Absent: None General Manager present: Darby Fuerst District Counsel present: David C. Laredo
The assembly recited the Pledge of Allegiance.	PLEDGE OF ALLEGIANCE
The Oath of Office was administered to Alvin Edwards and Judi Lehman.	ADMINISTER OATH OF OFFICE TO DIVISION 1 REPRESENTATIVE ALVIN EDWARDS, AND DIVISION 2 REPRESENTATIVE JUDI LEHMAN
The following comments were received during Oral Communications. (1) Mitzi Dallas expressed concern about the proliferation of wells in fractured rock formations. She requested that an environmental impact report be prepared to assess the cumulative impacts of constructing wells in fractured rock formations. (2) Peter Fallon expressed concern about the proliferation of wells drilled in fractured rock formations. He described them as a threat to public health, and recommended that the County of Monterey conduct an annual water quality survey of these wells. (3) Steve Dallas requested that the Board of Directors undertake a study of the environmental impacts of wells in fractured rock formations. He alleged that California American Water fire suppression connections could be used as an alternative water source for a property if the well becomes contaminated or can no longer produce water.	ORAL COMMUNICATIONS
On a motion by Director Edwards and second of Director Lehman, the Consent Calendar was adopted except for items 1, 3 and 11 that were pulled for separate consideration. The motion was approved unanimously on a vote of 7 – 0.	CONSENT CALENDAR
On a motion by Director Potter and second of Director Doyle, the minutes of the November 10, 2009 Special Meeting/Board Workshop were amended as follows: delete the words “Brackish Water” from the 3-Year Goal, Construction has begun on a Brackish Water Desalination Project. The minutes of November 16, 2009 were adopted as presented. The motion was approved unanimously on a vote of 7 – 0.	1.	Consider Adoption of Minutes of the November 10, 2009 Special Meeting/Board Workshop and November 16, 2009 Regular Board Meeting
Approved.	2.	Consider Adoption of Resolution No. 2009-12 Certifying Official Results of November 3, 2009 MPWMD Election
On a motion by Director Potter and second of Director Doyle, the Strategic Plan was adopted unanimously with the following change: delete the words “Brackish Water” from the 3-Year Goal, Construction has begun on a Brackish Water Desalination Project. The motion was adopted on a vote of 7 – 0.	3.	Consider Adoption of Strategic Plan that Includes 90-Day, 3-Year and 5-Year Goals
Approved.	4.	Consider Approval of MPWMD Newsletter Text
Approved.	5.	Consider Expenditure of Budgeted Funds to Publish and Distribute MPWMD Newsletter
Approved.	6.	Consider Expenditure of Budgeted Funds for Sleepy Hollow Steelhead Rearing Facility Stand-by Generator Maintenance Service with Quinn Power Systems for Fiscal Year 2009-10
Approved.	7.	Approve Expenditure of Funds Approved by Public Utility Commission for Landscape Irrigation Audits and Budgets
Approved.	8.	Consider Adoption of Resolution 2009-13 Amending MPWMD Rule 24, Table 1 -- Residential Fixture Unit Count Values
Approved.	9.	Consider Adoption of Resolution 2009-14 Amending MPWMD Rule 25.5, Table 4 --Ultra-Low Consumption Appliance Credits
Approved.	10.	Consider Adoption of Resolution 2009-17 Modifying Rule 162 -- Regulatory Water Production Targets for California American Water Systems
On a motion by Director Potter and second of Director Brower, the Board unanimously approved the appointment of Judi Lehman as representative and Bob Brower as alternate to the Watermaster. Establishment of a procedure for selection of representatives in the future was referred to the Rules and Regulations Review Committee. The motion was adopted on a vote of 7 – 0.	11.	Appoint Representative and Alternate to the Seaside Groundwater Basin Watermaster
Approved.	12.	Adopt Board Meeting Schedule for 2010
Approved.	13.	Consider Adoption of Treasurer's Report for July 2009
	PRESENTATIONS
A summary of Mr. Anthony’s report is on file at the District office and can be viewed on the District’s website. He reported that California American Water (Cal-Am) will compare water production against levels specified in the Final Cease and Desist Order (CDO) issued by the State Water Resources Control Board (SWRCB), even though implementation of the CDO has been delayed and the order is not currently in effect. He noted that Cal-Am’s infrastructure improvements related to the Aquifer Storage and Recovery Project (ASR) are complete and water is being delivered to the District’s injection/recovery wells. In response to questions from the Board, Mr. Anthony stated that connections for fire suppression are separately metered. If Cal-Am staff notice water use by one of those connections, they would investigate as to the cause. If the water was consumed for uses other than fire suppression, the customer would pay for that water and be advised that the connection can only be used for fire suppression. Mr. Anthony told the Board that Cal-Am is working closely with District staff on completion of all landscape irrigation water audits by January 15, 2010. He will provide an update at the January 28, 2010 Board meeting.	14.	Monthly Report from California American Water General Manager, Craig Anthony
Henrietta Stern, Project Manager, presented the report. An outline of Ms. Stern’s presentation is on file at the District office and can be viewed at the District’s website.	15.	Water Supply Project Alternatives Update
Stephanie Pintar, Water Demand Manager, presented the report. An outline of Ms. Pintar’s presentation is on file at the District office and can be viewed at the District’s website.	16.	Water Conservation Program Report
	GENERAL MANAGER’S REPORT
Darby Fuerst, General Manager, presented the report. An outline of the presentation is on file at the District office and can be viewed at the District’s website. Mr. Fuerst reported that for the period of October 1, 2009 through December 6, 2009, Cal-Am production from the Carmel River Basin was 181acre-feet under the production target of 1,727 acre-feet established as a result of State Water Resources Control Board (SWRCB) Order 95-10. Production from the Coastal Subareas of the Seaside Basin was 152 acre-feet under the production target of 808 acre-feet established by the Seaside Groundwater Basin Adjudication. Production from the Laguna Seca Subarea was 34 acre-feet over the production target of 48 acre-feet established by the Seaside Groundwater Basin Adjudication. Therefore, total Cal-Am production from the Seaside Basin was 181 AF under the adjudication target of 856 AF.	17.	Status Report on California American Water Compliance with State Water Resources Control Board Order 95-10 and Seaside Groundwater Basin Adjudication Decision
	ATTORNEY’S REPORT
District Counsel Laredo reported that on November 19, 2009, the Board discussed Cal-Am’s Application to the California Public Utilities Commission (CPUC) No. 04-09-019. No reportable action was taken. On December 14, 2009, the Board discussed agenda items A through I, and item 4. No reportable action was taken.	18.	Report on November 19, 2009 and December 14, 2009, 5:30 PM Closed Sessions of the Board
		3.	Conference with Legal Counsel – Existing Litigation (Gov. Code 54945.9 (a))
		A.	Application of California American Water Company to the Public Utilities Commission Application No. 04-09-019 – Coastal Water Project
		B.	Application of California American Water Company to PUC Application No. 09-XX-XXX –Mitigation Cost Reimbursement
		C.	Seaside v. California American Water (MBSE/Cal-Am Motion) (Appellate Court #HO34335; Superior Court Case No. M 66343)
		D.	MPWMD v. State Water Resources Control Board; Superior Court Case No. M102101
		E.	California American Water v. State Water Resources Control Board, Superior Court Case No. M102097
		F.	California American Water Advice Letter No. 809 (Request for Moratorium) Before the California Public Utilities Commission
		G.	Sierra Club, Carmel River Steelhead Association v. California American Water, Gary Locke, Department Of Commerce, Dr. Jane Lubchenko (NOAA), and Rodney McInnis (NMFS), (U.S. District Court, Northern District. Case No. 09 2870)
		H.	California American Water v. MPWMD (SWRCB/SNG) (Superior Court Case No. M 99622)
		I.	California American Water v. MPWMD (Ryan Ranch) (Superior Court Case No. M 101255)
	4.	Public Employee Performance Evaluation (Gov. Code 54957) -- General Manager
	5.	Adjourn to 7 PM Session
	DIRECTORS’ REPORTS (INCLUDING AB 1234 REPORTS ON TRIPS, CONFERENCE ATTENDANCE AND MEETINGS)
Director Edwards thanked voters in the City of Seaside for electing him to another term as representative to Division 1 on the Board of Directors.	19.	Oral Report on Activities of County, Cities, Other Agencies/Committees/ Associations
	PUBLIC HEARINGS
Director Edwards offered a motion to adopt the staff recommendation: (a) adopt the Findings of Approval; (b) approve Application #20090720GRE; (c) authorize issuance of MPWMD Permit #S09-31-L4 and the Conditions of Approval; and (d) direct staff to file a Notice of Exemption with the Monterey County Clerk. The motion was seconded by Director Pendergrass and adopted on a vote of 5 – 2. Directors Brower, Edwards, Lehman, Pendergrass and Potter voted in favor of the motion. Directors Doyle and Markey were opposed. The following comments were directed to the Board during the public hearing on this item. (1) Aaron Bierman, hydrologist that conducted hydrogeologic testing required to complete the water distribution permit application process for Saint John the Baptist Greek Orthodox Church. He stated that well monitoring associated with pump tests showed that no drawdown occurred in a well that was 420 acre-feet away from the church well. He stated that the church well can produce ten times more water than is estimated the project will need. (2) John Scourkes, President of St. John the Baptist Greek Orthodox Church. In response to a question from the Board, Mr. Scourkes stated that no shower facilities are proposed for the project. Plans include a kitchen and small meeting hall.	20.	Consider Approval of Application #20090720GRE to Create Greek Orthodox Church Water Distribution System, APN 259-021-013
Director Brower offered a motion to adopt the first reading version of Ordinance No. 142. The motion was seconded by Director Potter and approved unanimously on a vote of 7 – 0. No comments were directed to the Board during the public hearing on this item.	21.	Consider First Reading of Ordinance No. 142 -- An Ordinance of the Board of Directors of the Monterey Peninsula Water Management District Amending Regulation XV, the Expanded Water Conservation and Standby Rationing Plan, to Allow an Exception to the Mandatory Requirement for Implementation of Stage 5, 6, or 7 when a Final Cease and Desist Order is Issued
On a motion by Director Pendergrass and second from Director Edwards, the January through March 2010 Quarterly Water Supply Strategy and Budget was adopted unanimously on a vote of 7 – 0. No comments were directed to the Board during the public hearing on this item.	22.	Consider Adoption of January through March 2010 Quarterly Water Supply Strategy and Budget
	ACTION ITEMS
Director Potter made a motion to receive the report. The motion was seconded by Director Edwards. Director Brower offered an amendment to the motion. He proposed that the Ad Hoc Water Supply Planning Committee meet to discuss options for moving ahead on development of the 95-10 Desalination Project. Directors Potter and Edwards agreed to the amendment. The amended motion was approved unanimously on a vote of 7 – 0. No comments were directed to the Board during the public comment period on this item.	23.	Receive Report on MPWMD 95-10 Desalination Project
The Board took no action on this item. Chair Markey noted that Craig Anthony offered to provide a progress report to the Board on a monthly basis. Darby Fuerst described unaccounted for water use as leakage, stolen water, unreported fire department usage, street sweeping, unrecorded construction water, and meters that are under-reporting. The industry-wide standard is 10 percent. The standard within the Water Management District boundary is 7 percent. Cal-Am’s unaccounted-for-water use was 9.2 percent in November 2009. The SWRCB requires Cal-Am to reduce unaccounted-for water use to 7 percent by September 30, 2010. The CPUC requires Cal-Am to reduce unaccounted-for-water use to 9 percent between 2009 and 2011. Eric Sabolsice, Operations Manager for California American Water, gave a presentation on the company’s Water Loss Management Program focused on reducing unaccounted-for water use to limits set by regulators. The presentation is on file at the District office and can be viewed on the MPWMD website. He noted that Cal-Am’s goal is to reduce losses caused by main leaks, storage leaks and overflows, and leaks on service connections up to the customer meter. In response to questions from the Board, Mr. Sabolsice stated the following. Cal-Am must meet the 9 percent goal set by the CPUC, but will do everything possible to bring the rate of unaccounted-for water use down as far as possible. Cal-Am has submitted a request to the CPUC to approve local water rates that would provide funds for future improvements to the water delivery system and replacement of leaking water mains. The priority is replacement of aging infrastructure in Seaside and Carmel Valley, where leaks are most prevalent. Cal-Am will provide a monthly progress report to the Board. The following comments were directed to the Board during the public comment period on this item. (1) George Riley, a resident of Monterey, asked if Cal-Am believes that funding for infrastructure improvements approved by the CPUC will result in Cal-Am successfully meeting reductions in unaccounted-for water use required by the CPUC. Craig Anthony replied that Cal-Am has requested that the CPUC revise the unaccounted-for water use limit to reflect a specific amount in acre-feet, instead of a percentage of overall water produced. He noted that Cal-Am has improved the Hidden Hills water system, and is in the process of obtaining bids for work on replacement of leaking mains in other areas.	24.	Discussion of California American Water Unaccounted For Water Losses -- Presentations from Craig Anthony, California American Water and Darby Fuerst, MPWMD
Director Potter offered a motion to elect Board officers for 2010 as follows: Chair, Regina Doyle; Vice Chair, Bob Brower; Secretary, Darby Fuerst; and Treasurer, Rick Dickhaut. The motion was seconded by Director Edwards and adopted unanimously on a vote of 7 – 0. No comments were directed to the Board during the public comment period on this item. Director Potter exited the meeting following completion of item 25. The Board then considered item 24.	25.	Conduct Election of Board Officers for 2010
There was no discussion of the Informational Items/Staff Reports.	INFORMATIONAL ITEMS/STAFF REPORTS
	26.	Letters Received
	27.	Committee Reports
	28.	Carmel River Fishery Report for November 2009
	29.	Water Conservation Program Report October 2009
	30.	Monthly Allocation Report
	31.	Monthly California American Water Production Report
	32.	Monthly Water Supply Status Report
The meeting was adjourned at 9:30 PM	ADJOURN

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Darby Fuerst, Secretary to the Board

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